Universities face major funding crackdown over fake students who can’t speak English

The new measures will mean providers with 300 or more students will be required to meet the same standards as universities and register to be regulated by the Office for Students from 2028/29.

The crackdown will target courses where there are clear signs of exploitation, such as admitting students who have very poor English language skills, very low attendance rates, or students who are using their place at the provider just to access public money.

The new rules intend to curb fraud in the student finance system that cost taxpayers £2million in 2022-2023, the Department for Education said.

Ms Phillipson has written to all providers to warn them that exploitative or poor quality arrangements must be sorted out or closed down.

She said: “Too many rogue operators have treated students as a route to fast cash, not as people investing in their future.

“Those days are over. If you use public money, you will be held accountable and face proper scrutiny.”

As per the terms of the new crackdown, ministers will be given licence to target franchise deals where there are clear signs of people exploiting the system.

Examples of this includes students with a poor grasp of English or those who fail to attend lectures on a regular basis.

The Office for Students (OfS) will be tasked with regulating franchised providers with 300 or more students.

Those who fail to meet the standards of the new terms will be cut off from accessing student loan funding from 2028-29.

A Government report published in January found that 96 UK universities hold franchise agreements with 341 other institutions, with 237 not registered with the OfS.

Over half of the £4.1million in fraudulent student loan claims identified by the Student Loans Company in 2022-23 were found to be from people enrolling at franchised degrees.

An increasing financial burden, coupled with years of frozen tuition has forced universities to seek funds from elsewhere to support their central teaching.

Ms Phillipson announced earlier this year tuition fees will rise in line with inflation for at least the next two academic years.

She has called on universities to up their standards in return, and ministers are taking action by pushing for the sector to address its finances.

The OfS warned in May that 43 per cent of universities in England will drop into a deficit this year.

Vivienne Stern, the chief executive of Universities UK (UUK), told The Telegraph: “It is vital that franchise provision is underpinned by high and robust standards and we support this step, which will help to protect the higher education sector’s world-renowned reputation for quality.

“UUK’s members have been taking extensive actions to tighten controls, and we have long championed the introduction of measures requiring franchise partners to register with the OfS.”